Correlation Between Eliem Therapeutics and BeiGene
Can any of the company-specific risk be diversified away by investing in both Eliem Therapeutics and BeiGene at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Eliem Therapeutics and BeiGene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eliem Therapeutics and BeiGene, you can compare the effects of market volatilities on Eliem Therapeutics and BeiGene and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Eliem Therapeutics with a short position of BeiGene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eliem Therapeutics and BeiGene.
Diversification Opportunities for Eliem Therapeutics and BeiGene
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eliem and BeiGene is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Eliem Therapeutics and BeiGene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BeiGene and Eliem Therapeutics is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Eliem Therapeutics are associated (or correlated) with BeiGene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BeiGene has no effect on the direction of Eliem Therapeutics i.e., Eliem Therapeutics and BeiGene go up and down completely randomly.
Pair Corralation between Eliem Therapeutics and BeiGene
Given the investment horizon of 90 days Eliem Therapeutics is expected to under-perform the BeiGene. In addition to that, Eliem Therapeutics is 1.61 times more volatile than BeiGene. It trades about -0.28 of its total potential returns per unit of risk. BeiGene is currently generating about -0.07 per unit of volatility. If you would invest 22,451 in BeiGene on August 30, 2024 and sell it today you would lose (1,835) from holding BeiGene or give up 8.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.73% |
| Values | Daily Returns |
Eliem Therapeutics vs. BeiGene
Performance |
| Timeline |
| Eliem Therapeutics |
| BeiGene |
Eliem Therapeutics and BeiGene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eliem Therapeutics and BeiGene
The main advantage of trading using opposite Eliem Therapeutics and BeiGene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eliem Therapeutics position performs unexpectedly, BeiGene can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in BeiGene will offset losses from the drop in BeiGene's long position.| Eliem Therapeutics vs. Pmv Pharmaceuticals | Eliem Therapeutics vs. MediciNova | Eliem Therapeutics vs. Pharvaris BV | Eliem Therapeutics vs. PepGen |
| BeiGene vs. Ikena Oncology | BeiGene vs. Eliem Therapeutics | BeiGene vs. HCW Biologics | BeiGene vs. RenovoRx |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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